JICPT| USDCNH testing policy bottom of Chinese government
Updated
Hello everyone. USDCNH created a recent new low since May of 2018 when the trade tensions between US and China emerged, followed by sharply depreciation of Renminbi.
With the help of strong export in the past two years, Renminbi went against the greenback by 12ish%. If the Renminbi becomes too strong, it'll undermine its export competitiveness. There was no wonder that the government held two meetings last year when the pair touched 6.35(policy bottom), reclaiming the double direction movement of the currency. The government also raised reserve requirement ratio for foreign currency twice from 5% to the current 9%. I reckoned it as a signal to prevent it from further appreciation.
So, how does the market react? Does the downtrend of USDCNH get reversed? Not yet from the chart.
What got my attention is the 400 bullish daily candle on Jan 27th with huge volume compared to nearby candles. I guess it was sort of a intervention and I don't believe the big movement was created by retail investors. Then, there was huge volume bar(golden) candle with thin spread, suggested the battle between buyers and sellers. It seemed that buyers took a watch attitude since then.
Now, the nearest control high is 6.36-6.38. Until this zone got violated, the pair may start accumulation to form a sideway market before coming up.
I'm expecting another big bullish bar soon. What do you think?
With the help of strong export in the past two years, Renminbi went against the greenback by 12ish%. If the Renminbi becomes too strong, it'll undermine its export competitiveness. There was no wonder that the government held two meetings last year when the pair touched 6.35(policy bottom), reclaiming the double direction movement of the currency. The government also raised reserve requirement ratio for foreign currency twice from 5% to the current 9%. I reckoned it as a signal to prevent it from further appreciation.
So, how does the market react? Does the downtrend of USDCNH get reversed? Not yet from the chart.
What got my attention is the 400 bullish daily candle on Jan 27th with huge volume compared to nearby candles. I guess it was sort of a intervention and I don't believe the big movement was created by retail investors. Then, there was huge volume bar(golden) candle with thin spread, suggested the battle between buyers and sellers. It seemed that buyers took a watch attitude since then.
Now, the nearest control high is 6.36-6.38. Until this zone got violated, the pair may start accumulation to form a sideway market before coming up.
I'm expecting another big bullish bar soon. What do you think?
Note
It got some response, pending challenging the downtrend channel.
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